Divided 9th Circuit tells lower court to sort out seating mess

Friday, July 1, 2011

Sitting next to your former boss at public meeting shouldn’t be cause for punishment, a divided federal appeals court panel has ruled.

Employers must be able to come up with some real evidence of disruption before disciplining employees for protected activity such as freedom of association. They can’t just rely on speculation or use a “because I said so” defense. That seemed to be the clear message of a divided three-judge panel decision of the 9th U.S. Circuit Court of Appeals in Nichols v. Dancer.

The unusual case began in late 2003 when a dispute developed between Jeffrey Blanck, the General Counsel for Washoe County (Nev.) School District, and James Hager, the district superintendent. After Blanck claimed Hager had misused funds, Blanck was suspended from his duties.

After Blanck’s suspension, his administrative assistant, Kathleen Nichols, was transferred to a position in the human relations department, while final decisions were made about Blanck’s status as general counsel. Apparently, Nichols performed well in HR and got along well with other employees, including Laura Dancer, head of HR.

That goodwill changed in March 2004, when Nichols attended a school board meeting. On the board’s agenda was whether to keep or terminate Blanck. Nichols and others wanted to see whether Blanck would be retained. The day before, Dancer had told Nichols that she would return to work in the general counsel’s office whether Blanck was retained or not.

At the meeting Nichols sat next to Blanck, but did not engage in conversation with him. At the meeting, the board decided not to retain Blanck.

The next day, Dancer called Nichols into her office and told her there were questions about her loyalty — seemingly because she had sat next to Blanck at the meeting. Dancer told Nichols she could remain in HR at a frozen salary but could no longer return to the general counsel’s office. Dancer also gave Nichols the option of early retirement, which she took.

Nichols later filed suit in federal court, alleging that the district retaliated against her for her association with Blanck. The school district argued that it could dismiss Nichols as a matter of patronage. A district court agreed with this argument in 2007, but the 9th Circuit reversed in a 2009 ruling.

The 9th Circuit said that “because Nichols was terminated for a perceived lack of personal loyalty, rather than political loyalty, we conclude that the patronage dismissal doctrine does not apply to her termination.”

The case was sent back down to the district court, which again granted summary judgment to the school district. This time the district court determined that Nichols had engaged in expressive conduct that triggered First Amendment free-association protections. It further said that her attending the school board meeting related to a matter of public concern or importance — a key factor in cases involving public employees’ free expression.

However, the lower court still ruled in favor of the school district. The school district’s efficiency interests, the court found, outweighed Nichols’ First Amendment rights under the balancing prong of Pickering v. Board of Education (1968), the U.S. Supreme Court’s seminal public-employee free-speech decision that often serves as the guiding case in free-association cases as well.

Nichols appealed to the 9th Circuit, which reversed by a 2-1 vote in its June 24 opinion. In her majority opinion, Judge M. Margaret McKeown, joined by Judge Richard A. Paez, emphasized that the school district had no evidence of any disruption caused by Nichols sitting as she sat quietly next to Blanck.

“The fact that public employers have significant leeway to regulate employee speech, however, does not mean that their discretion is without bounds,” McKeown wrote. “An employer must provide some evidence by which we can measure whether its claims of disruption are reasonable.”

The panel majority found no evidence that Nichols’ attendance at the meeting and her sitting next to Blanck disrupted anything. “The District did not produce evidence to establish that its predictions of disruption or disloyalty are anything but speculation.”

McKeown concluded: “The long and short of it is that Nichols is an employee caught in the crossfire between the District and her former boss. In the absence of any evidence that she was disloyal, had disrupted the office or was even reasonably likely to cause a disruption in the future … the District sanctioned her for simply showing up at a public meeting and sitting next to Blanck.”

Judge Thomas M. Reavley, a 5th U.S. Circuit Court of Appeals judge who sat by designation on the panel, dissented. He reasoned that Nichols’ “continued communication and confidential relationship with Blanck justified the legitimate administrative interest in moving her from the legal office.”

“This case is about going back to basics,” said Blanck, Nichols’ former boss, who represents her in her lawsuit. “Nevada has a state law that allows people to attend public meetings. Employees should be able to go to a public meeting and sit where they want and associate with whom they want without fear of being disciplined.”

“If the court ruled the other way, it would be telling employees — yes you can come to the public meeting but your employer can discipline you for anything,” Blanck said. “It would have had a severe chilling effect. It would have been global winter, not global warming.”

“The case is now sent back to the trial court where hopefully it will go to trial or be settled,” he added. “It has been seven years since this lawsuit was filed.”

Sitting next to your former boss at public meeting shouldn’t be cause for punishment, a divided federal appeals court panel has ruled.

Employers must be able to come up with some real evidence of disruption before disciplining employees for protected activity such as freedom of association. They can’t just rely on speculation or use a “because I said so” defense. That seemed to be the clear message of a divided three-judge panel decision of the 9th U.S. Circuit Court of Appeals in Nichols v. Dancer.

The unusual case began in late 2003 when a dispute developed between Jeffrey Blanck, the General Counsel for Washoe County (Nev.) School District, and James Hager, the district superintendent. After Blanck claimed Hager had misused funds, Blanck was suspended from his duties.

After Blanck’s suspension, his administrative assistant, Kathleen Nichols, was transferred to a position in the human relations department, while final decisions were made about Blanck’s status as general counsel. Apparently, Nichols performed well in HR and got along well with other employees, including Laura Dancer, head of HR.

That goodwill changed in March 2004, when Nichols attended a school board meeting. On the board’s agenda was whether to keep or terminate Blanck. Nichols and others wanted to see whether Blanck would be retained. The day before, Dancer had told Nichols that she would return to work in the general counsel’s office whether Blanck was retained or not.

At the meeting Nichols sat next to Blanck, but did not engage in conversation with him. At the meeting, the board decided not to retain Blanck.

The next day, Dancer called Nichols into her office and told her there were questions about her loyalty — seemingly because she had sat next to Blanck at the meeting. Dancer told Nichols she could remain in HR at a frozen salary but could no longer return to the general counsel’s office. Dancer also gave Nichols the option of early retirement, which she took.

Nichols later filed suit in federal court, alleging that the district retaliated against her for her association with Blanck. The school district argued that it could dismiss Nichols as a matter of patronage. A district court agreed with this argument in 2007, but the 9th Circuit reversed in a 2009 ruling.

The 9th Circuit said that “because Nichols was terminated for a perceived lack of personal loyalty, rather than political loyalty, we conclude that the patronage dismissal doctrine does not apply to her termination.”

The case was sent back down to the district court, which again granted summary judgment to the school district. This time the district court determined that Nichols had engaged in expressive conduct that triggered First Amendment free-association protections. It further said that her attending the school board meeting related to a matter of public concern or importance — a key factor in cases involving public employees’ free expression.

However, the lower court still ruled in favor of the school district. The school district’s efficiency interests, the court found, outweighed Nichols’ First Amendment rights under the balancing prong of Pickering v. Board of Education (1968), the U.S. Supreme Court’s seminal public-employee free-speech decision that often serves as the guiding case in free-association cases as well.

Nichols appealed to the 9th Circuit, which reversed by a 2-1 vote in its June 24 opinion. In her majority opinion, Judge M. Margaret McKeown, joined by Judge Richard A. Paez, emphasized that the school district had no evidence of any disruption caused by Nichols sitting as she sat quietly next to Blanck.

“The fact that public employers have significant leeway to regulate employee speech, however, does not mean that their discretion is without bounds,” McKeown wrote. “An employer must provide some evidence by which we can measure whether its claims of disruption are reasonable.”

The panel majority found no evidence that Nichols’ attendance at the meeting and her sitting next to Blanck disrupted anything. “The District did not produce evidence to establish that its predictions of disruption or disloyalty are anything but speculation.”

McKeown concluded: “The long and short of it is that Nichols is an employee caught in the crossfire between the District and her former boss. In the absence of any evidence that she was disloyal, had disrupted the office or was even reasonably likely to cause a disruption in the future … the District sanctioned her for simply showing up at a public meeting and sitting next to Blanck.”

Judge Thomas M. Reavley, a 5th U.S. Circuit Court of Appeals judge who sat by designation on the panel, dissented. He reasoned that Nichols’ “continued communication and confidential relationship with Blanck justified the legitimate administrative interest in moving her from the legal office.”

“This case is about going back to basics,” said Blanck, Nichols’ former boss, who represents her in her lawsuit. “Nevada has a state law that allows people to attend public meetings. Employees should be able to go to a public meeting and sit where they want and associate with whom they want without fear of being disciplined.”

“If the court ruled the other way, it would be telling employees — yes you can come to the public meeting but your employer can discipline you for anything,” Blanck said. “It would have had a severe chilling effect. It would have been global winter, not global warming.”

“The case is now sent back to the trial court where hopefully it will go to trial or be settled,” he added. “It has been seven years since this lawsuit was filed.”